How do Closing Costs Work?
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All residential real estate transactions incurs certain costs. Buyers and sellers almost always split these closing costs, as specified in the real estate sales contract.
Many of the closing costs associated with buying a house are associated with getting a mortgage loan. Since Johnson Mortgage Company LLC is highly experienced with mortgages and closings, we often explain the details of closing costs.
The Good Faith Estimate (GFE)
Buyers get a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. This cost estimate comes out of the loan officer's past experience. It's important to note that while our GFEs are very accurate, we can't always estimate your closing costs to the penny. We explain Good Faith Estimates with buyers almost every day, so we are happy to answer any questions you have about closing costs.
Below is a fairly generic list of closing costs. We will provide a specific list of your closing costs when we give you a Good Faith Estimate.
Standard Closing CostsLoan-Related Costs
- Getting YourCredit Report
- Interest Payment
- Escrow Fees
- Various Taxes
- Loan Origination Fee
- Points — lower your mortgage interest rate (optional)
- Appraisal Fee
- Recording Fees and Transfer Taxes
- Flood or Quake Insurance if applicable
- Private Mortgage Insurance (PMI)
- Title Insurance